Homeownership Only Possible In 40s For 20% Of Brits

Homeownership Only Possible In 40s For 20% Of Brits
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17 April 2024 – A recent Nationwide poll revealed that young Brits are pessimistic about homeownership. One out of five surveyed expressed that they expect to own homes only in their 40s. 

It reflects a massive departure from the current average first-time buyer age of 33.

Nationwide recently unveiled the poll results that shed light on homeownership insights among young Brits. 

Of the 1,000 aspiring homeowners surveyed, 84% cited the cost of living crisis as the most significant factor affecting their homeownership plans. Meanwhile, 49% are put off buying a starter home because of affordability issues. 

60% also admitted they consider delaying buying their first home for up to three years. 

High deposits are one of the biggest barriers to homeownership

High deposits are among the most significant barriers preventing first-time buyers from entering the property market. 31% of respondents said that saving for a deposit is challenging enough as it is.

52% admitted they have less money to allocate for a deposit due to financial challenges and costs. Another 29% said they did not receive as much additional financial support from the Bank of Mum and Dad as they used to, likely due to the same economic pressures.

Case in point, 26% of potential homeowners have been laying aside funds for their deposits for the past three to five years. Meanwhile, 10% have been saving for six or more years. 

Furthermore, the poll highlighted the gap between what first-time buyers had on hand versus what the property market demands. 

The average amount respondents had available for a house deposit was £9,533. However, this is far too inadequate to cover the 10% deposit of a typical first-time buyer home with an average price of £223,554—based on Nationwide’s House Price Index. 

More than half of the respondents had up to £5,000 available. Unfortunately, one in four had only up to £1,000, and 11% had none.

Affordability continues to challenge first-time buyers

It’s not just high deposits but the high mortgage payments deterring potential homeowners. A staggering 80% voiced concerns regarding mortgage payments. 

44% are particularly concerned with affordability. Of this group, 20% had trouble looking for properties within their budget. 14% could not sustain the monthly payments, while 10% had difficulty borrowing a sufficient amount for the mortgage. 

In the past, it would not have been unimaginable to buy a property with a single income; however, the current gap between incomes, mortgage rates, and property prices says otherwise. So, many aspiring first-time buyers are forced to reconsider their options when purchasing a home.

For example, 57% of respondents plan to buy with a partner. Meanwhile, 12% are open to purchasing a home with a relative.

It’s not just who to buy with but also where to buy that aspiring homeowners are willing to compromise on. 70% will relocate as far as 50 miles away just to be able to purchase a starter home.  

55% are willing to buy where house prices are more affordable or where there are more spacious properties, even if the location is in another part of the country. 

Getting that first home is as challenging as it ever has been. We need to solve the first-time buyer conundrum, which is why Nationwide has continually called for government to set up an independent review of the first-time buyer market.

Rachel Sinclair, Director of Mortgages and Financial Wellbeing

Our Opinion

For a while now we have said that property prices are just not sustainable. The most recent data from Nationwide confirms this. We got to a point where first-time buyers expect to wait until they are in their 40s to get onto the property ladder.

Let this sink in for a moment. That’s a time in people’s life when their parent’s generation was thinking about buying a bigger home to accommodate the needs of a growing family. At this rate, for many people buying a home will become an impossible dream.

But the price rises and increased mortgage rates aren’t the core issue here. Prices have risen so much because we just don’t have enough homes in this country. The lack of supply pushes up prices.

Yes, there were other factors, like the rush to buy bigger properties with outside space during the pandemic. This has turbocharged price increases, that would ordinarily take much longer to be reached.

But the fundamental problem that the property market faces is that demand outstrips supply. This can only be solved by the right policies.

We need to build more affordable housing. We need to ensure that buildings aren’t unused and empty that could be converted into residences. We need to make sure that locals aren’t priced out of their areas because of short-term and holiday lets.

All these things would make a difference. But unfortunately the government doesn’t seem to recognise the real issues or is unwilling to address them.

Author

  • News Desk

    Our news desk team includes a qualified architect, a freelance journalist, and a fanatical property expert who has over 12 years experience in the industry.

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